Seattle's tax on big business to impact travel companies

Seattle's tax on big business to impact travel companies

An annual "head tax" of $275 per employee passed by the Seattle City Council on Monday will impact large travel companies that operate in the Emerald City.

The council passed the tax, which takes effect next year, to address a growing dearth of affordable housing and expanding homelessness. It applies to companies that gross at least $20 million per year in the city.

Among the travel companies that had come out against the tax were Holland America Group, Expedia Group and Alaska Airlines.

Holland America Group, a subsidiary of Carnival Corp., said that it employs more than 1,600 people in Seattle, where it keeps its corporate headquarters. Holland America Group's cruise lines (Holland America Line, Princess and Seabourn) will make 83 departures from Seattle this summer, contributing an estimated $225 million to the economy.

"We agree it is important to make Seattle a safe, welcoming and attractive place for all of its citizens, our employees, our guests and for attracting tourism. This is essential for the city's long-term success and vibrancy," the company said. "Additional taxes on successful businesses who already pay many fees and taxes is not a substitute for efficient and focused attention from existing city government sources, however."

Both Expedia Group and Alaska declined to comment on the head tax Tuesday, but Expedia CEO Mark Okerstrom and Alaska CEO Brad Tilden signed a letter opposing an earlier version of the head tax ordinance, which would have cost large companies in Seattle $500 per employee.

The letter, posted on the website Medium, was signed by more than 100 business executives. It states that signees "oppose this tax and recommend an alternate approach."

The tax would only affect 3% of Seattle's largest businesses, "making businesses pay a price for creating jobs. This is like telling a classroom that the students who do the most homework will be singled out for detention."

Instead, the letter suggested the council scrap the idea of the tax for several alternatives. "A proper approach would combine evaluating the need for additional expenditures beyond the city's 17.4% increase the past three years, tax revenue increases based on an optimal mix of taxes, a prioritized spending plan to address both housing and infrastructure, as well as new zoning and related policies to reduce the costs of housing and construction."

Expedia plans to move from its headquarters in the suburb of Bellevue to Seattle in 2020. Alaska, meanwhile, houses its corporate headquarters in the municipality of SeaTac, home to Seattle's airport. The airport, however, is run by the Port of Seattle.

Neither the port nor representatives of the Seattle City Council responded to emails Tuesday seeking clarification about whether airlines operating out of SeaTac are subject to the tax.


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